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"Pure imitation won't lead to sustainable growth. If we just copy silicone oil production, it's not a real development plan for an organic silicon enterprise. Our long-term goal is to break free from this cycle of imitation," said Sun Huiyi, Chairman of Shandong Dayi Chemical Co., Ltd., in a recent interview with reporters.
He explained that everyday products like shower gels give the skin a moisturizing feel, and skincare products make the skin smooth and comfortable. The vibrant colors of artificial leather and the softness of clothing all come from the use of silicone intermediates. These compounds have a wide range of applications, but while over 3,000 varieties are produced abroad, China can only manufacture between 200 and 300. Jiang Jianxiong, deputy director of the Zhejiang Provincial State Key Laboratory of Organic Silicon, noted that many domestic products are imitations, with very few high-end options available.
Silicone is often called the "MSG of industry" due to its excellent properties: electrical insulation, radiation resistance, flame retardancy, corrosion resistance, and thermal stability, along with good biocompatibility. It's used in daily chemicals, electronics, transportation, plastics, and rubber industries. With so many varieties, silicone is a unique sector in new materials, but it starts with a few basic monomers.
According to industry forecasts, demand for organic silicon products in China will grow by more than 25% in the coming years, with an average annual growth rate twice that of the plastics industry and three times that of GDP. As a result, the government actively supports the development of this sector. In 2003, the Ministry of Science and Technology and the Ministry of Commerce included organic silicon in the "Encourage Foreign Investment in High-tech Products Catalog (2003)." During the "Eleventh Five-Year Plan" period, the market gap in China’s organic silicon industry is expected to remain, offering great potential and business opportunities.
However, despite the promising outlook, there are challenges. Currently, about 300 companies produce organic silicon intermediates, but only a few have high technological content and can produce over 10,000 tons annually. Kong Cong of Qufu Wanda Chemical pointed out that many domestic firms still rely on copying foreign products. Several of Wanda’s patented products are also replicated by others. According to Jiang Jianxiong, simple imitation only addresses surface issues and fails to create a full range of technologies or products, leaving Chinese companies behind in both application and competitiveness.
International chemical giants are entering the Chinese market, with companies like Dow Corning investing half of their global capital in China. If domestic firms continue to imitate, they risk losing not only the high-end market but also their existing share. So, how can Chinese companies break free from this cycle?
Sun Huiyi believes the key is to focus on one small area, such as dimethyl silicone oil, and invest heavily to achieve breakthroughs. By striving for the best quality and performance in the industry, companies can succeed. He shared his experience: when they first started, they targeted the cosmetics industry, developing compound hair oils that filled a market gap. This led to improved shampoo quality and recognition in the daily chemical sector. They then expanded into other areas, like aluminum foil protectors and spandex spinning oils, significantly reducing costs and replacing imports.
Another successful example is Zhangjiagang City Guotai Huarong Chemical New Material Co., Ltd., which has gained visibility in the silane coupling agent market. A marketing representative from the company emphasized that during the survival phase, companies must focus on improving product quality. Once they survive, they need to enhance their R&D capabilities.
In short, simply imitating won’t help these companies grow. Without independent research and development, it's hard to achieve substantial profits in the market. Innovation and specialization are the keys to long-term success.